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Could Obama ignore Congress if they refuse to raise the debt ceiling? Yes, and

1970-01-01 02:00:00

rlp

As both major parties debate their conditions for raising the nation's debt

ceiling, some Senate Democrats and constitutional scholars are questioning

whether the limit is constitutional in the first place.

Delaware Sen. Chris Coons told The Huffington Post this week that he's part of

a group of lawmakers now examining whether, in the case that debt negotiations

fail, the Treasury could ignore Congress and continue paying its bills on time.

"This is an issue that's been raised in some private debate between senators as

to whether in fact we can default, or whether that provision of the

Constitution can be held up as preventing default," Coons told Huffington Post

reporters Ryan Grim and Samuel Haass. "[I]t's going to get a pretty strong

second look as a way of saying, 'Is there some way to save us from ourselves?'

"

Critics of the debt limit cite the Fourteenth Amendment to the Constitution,

which states: "the validity of the public debt of the United States, authorized

by law, including debts incurred for payment of pensions and bounties for

services in suppressing insurrection or rebellion, shall not be questioned."

(Emphasis ours)

Of course, the Fourteenth Amendment is open to wide, and varying,

interpretation and debate. The most basic question here is, does a limit on

debt "question" the "validity" of the debt?

Legal scholar Garrett Epps, writing in The Atlantic in April, said that a case

could easily made for simply ignoring the congressionally mandated debt limit.

"This provision makes clear that both the monies our nation owes to

bondholders, and the sums promised in legislation to those receiving pensions

set by law from the federal government, must be paid regardless of the

political whims of the current congressional majority," Epps wrote.

In essence, Epps argues that Obama should stand before Congress and say, Tough

luck--the Constitution says we can't default. Epps argued that in the event

that Congress does not act, Obama should (and could) instruct the Treasury

Department to issue "binding debt instruments on the world market sufficient to

cover all the current obligations of the United States government, even in

default of Congressional action to meet those obligations."

President Obama's own views on the subject, however, are unclear. During his

press conference Wednesday, Obama dodged a question about the debt limit's

constitutionality, telling NBC's Chuck Todd: "I'm not a Supreme Court justice,

so I'm not going to put my constitutional law professor hat on."

Obama understandably didn't want to show his cards by hashing out a plan for

how he would act in the event Congress fails to raise the debt ceiling. But

some observers have already outlined how he could--and still get away with it.

Writing in the Financial Times in April, Former Reagan adviser and Treasury

official Bruce Bartlett said the Obama administration could justify ignoring

Congress to ensure the nation pays its debts.

"The president would be justified in taking extreme actions to protect against

a debt default. In the event that congressional irresponsibility makes default

impossible to avoid, he should order the secretary of the Treasury to simply

disregard the debt limit and sell whatever securities are necessary to raise

cash to pay the nation's debts. They are protected by the full faith and credit

of the United States and preventing default is no less justified than using

American military power to protect against an armed invasion without a

congressional declaration of war," Bartlett wrote. "Under those circumstances,

when default is the only possible alternative, I believe that the president and

the Treasury secretary would be justified in taking extraordinary action to

prevent it, even if it means violating the debt limit."

However, if Obama were to follow that route, it's still unclear how the courts

would rule.

Grim and Saass point to the 1935 Perry v. U.S Supreme Court ruling, which

determined that the language in the Fourteenth Amendment does apply to the

national debt. What's more, they observe, according to the majority opinion on

the case, no act of Congress can undermine promises of debt payment from the

federal government.

"To say that the Congress may withdraw or ignore that pledge is to assume that

the Constitution contemplates a vain promise; a pledge having no other sanction

than the pleasure and convenience of the pledgor," wrote Chief Justice Charles

Evans Hughes, who presided over the case.

Even with that precedent, however, the specific debt limit as we know it today

has not yet seen its day in court. Should the White House's negotiations with

Congress on the debt ceiling fail, it will be up to Obama to decide whether he

wants to start that fight, which would no doubt require years-long court

battles to settle.